Gathid Reports $1.68m ARR After Customer Mix Changes and $154k Cash Outflow
Gathid Ltd reports a stable customer base despite a short-term dip in annual recurring revenue, while managing ongoing legal disputes and positioning for renewed growth.
- Annual Recurring Revenue dips to $1.68 million after three customer non-renewals
- Customer base remains stable with three new contracts aligned to Ideal Customer Profile
- Operational cash outflow reduced to $154,000, closing cash at $4.56 million
- Ongoing legal dispute with Bloom delays finalisation of physical security business sale
- Board confident in growth resumption supported by disciplined sales and cost management
Quarterly Financial Snapshot
Gathid Ltd has released its first quarter update for the 2026 financial year, revealing a nuanced picture of operational stability mixed with strategic recalibration. The company closed the quarter with $4.56 million in cash and equivalents, a slight decrease from $4.72 million the previous quarter. Annual Recurring Revenue (ARR) declined to $1.679 million from $1.936 million, primarily due to three customer non-renewals. However, this still represents a robust 140% increase compared to the $0.7 million ARR recorded at the end of FY24.
Customer Dynamics and Strategic Focus
The dip in ARR reflects a deliberate strategic shift. Two customers who did not renew were outside Gathid’s Ideal Customer Profile (ICP), and the company chose not to renew a third contract due to limited strategic alignment. This pruning of the customer base is part of Gathid’s effort to refine its market focus and enhance long-term value. Encouragingly, the company secured three new enterprise contracts during the quarter, all well aligned with its ICP, signaling a positive trajectory for future growth.
Operational and Market Engagement
Operational cash outflow was $154,000, an improvement from the previous quarter, helped by government grants and cost realignments. The company also increased staff costs slightly with a key new hire in North America, underscoring its commitment to expanding its presence in critical markets. Gathid’s marketing efforts included participation in targeted industry events across Australia, Hong Kong, and the United States, which have generated a stronger sales pipeline and fostered new partnerships with systems integrators and resellers.
Legal Dispute and Business Divestment
Meanwhile, the sale of Gathid’s physical security business to Bloom, completed in September 2023, remains unresolved due to ongoing court proceedings concerning net working capital adjustments. The company continues to engage constructively with Bloom and expects no material liabilities, but a definitive timeline for resolution remains elusive. This legal uncertainty adds a layer of complexity to Gathid’s near-term outlook and its plans for resuming full trading on the ASX.
Looking Ahead
CEO Peter Hill emphasised that the quarter’s experiences, including the customer churn, have strengthened Gathid’s platform and market understanding. The company is now better positioned to support large-scale deployments and accelerated implementations, with growing momentum from integrators and resellers. The Board remains confident that disciplined sales execution and cost management will drive a return to growth, while actively exploring all options to maximise shareholder value amid the ongoing legal matters.
Bottom Line?
Gathid’s strategic customer realignment and legal challenges set the stage for a pivotal growth phase ahead.
Questions in the middle?
- How will the ongoing legal dispute with Bloom impact Gathid’s financial and operational outlook?
- What is the timeline and expected impact of the new customer contracts on ARR growth?
- How will Gathid’s expanded partnerships with integrators and resellers translate into market share gains?
